Monthly Archives: April 2012

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New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since before the start of the credit crunch nearly five years ago.

The easing of foreclosures is seen as key by many economists, since the glut of these properties being sold at a discount has been a significant drag on home prices.

“The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory,” said Sean O’Toole, chief executive of ForeclosureRadar.com. “If it continues, it will likely mean that we’ve either seen a bottom—or have passed a bottom—in prices because of limited supply and still strong demand.”

Home prices remain depressed from their peak in 2007, when the median-priced home in Southern California sold for $505,000. The median price last month was $280,000.

The economy overall has been improving, however, with unemployment, retail sales, corporate profits and other measures showing steady if unspectacular gains. Housing has been one of the last holdouts, but analysts note that prices have stabilized and sales volume has been gaining.

“What are important are sales and inventory, and those are pointing in the right direction,” says Christopher Thornberg, a principal at Beacon Economics who was one of the early callers of the housing crash. “I would say that by the end of the year, they should translate into better prices.”

Thornberg adds, “The recovery is here.”

Notices of default, the first step in the foreclosure process, fell to 56,258 statewide in the first three months of the year, a 17.6 percent drop from the same period last year, DataQuick of San Diego reported Tuesday. That was the fewest number of default notices filed since the second quarter of 2007.

Banks still retain many foreclosed properties on their books, and some analysts have predicted that housing prices could weaken again if lenders dump these properties into the recovering market. But O’Toole and other analysts see that long-feared “second wave” as increasingly unlikely, pointing out that the banks would be acting against their own interests by undercutting prices through a fire sale.

“A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem,” DataQuick President John Walsh says. “It’s not necessarily playing out the way some pundits thought.”

Low interest rates and the availability of bargain-priced properties are drawing more buyers into the market.

Bobbie Dunlap, 61, an office manager, said she recently bought a bank-owned home for $225,000 that she intends to fix up and rent out. The South Gate, Calif., resident had to raise her price to beat competing bids on the two-bedroom property in nearby Bellflower. She hopes that the rental income from the investment will provide her with a financial cushion when she stops working.

“It is in pretty good shape, but it still needs some extra work, of course,” Dunlap says.

Betting on the rebound, investors made up a record share of buyers in Southern California during the first two months of the year, according to DataQuick. As more foreclosed homes in hard-hit neighborhoods are filled with renters, an increasing number of everyday buyers will grow interested in owning, said Ivy Zelman, chief executive of Zelman & Associates, a New York housing research firm.

“This is not a robust recovery, but I feel confident that we are not sitting here lingering,” says Zelman, who predicts that home prices will end the year up about 1 percent. “There really is more meat to the bone.”

Several factors continue to hold back a major turnaround in housing, including a weak job market, tight mortgage lending standards and the huge number of homeowners who owe more on their mortgages than their homes are worth, leaving them essentially stuck in their properties. And the absence of a major housing recovery is likely to hold back the broader economy.

“Housing generates a ton of jobs and income. However, I don’t think the housing recovery is going to be nearly as robust this time as it has been in prior cycles,” said Christopher Low, chief economist for FTN Financial. “The bubble started with froth in local markets and then spread out to a national level; the recovery is going to come in local markets and eventually spread and become a national phenomenon.”

Other new housing data also point to a fledgling recovery.

New-home sales nationally fell 7.1 percent in March from the previous month, the Commerce Department said Tuesday, but that was partly because it revised February sales figures up significantly. Even though the figure for March was the lowest since November, overall sales of new homes are up about 16 percent for the first three months of the year compared with 2011, the department said. The report helped boost the Dow Jones industrial average 74.39 points to 13,001.56.

That improvement means that new-home sales will probably be stronger than last year’s, which were the worst on record.

One of the most widely watched measures on home values, the Standard & Poor’s/Case-Shiller index of 20 U.S. cities, showed price declines moderating from January to February. Prices fell 0.8 percent from January to February, and were down 3.5 percent from February 2011. Los Angeles fell 0.8 percent in February from the previous month, while San Francisco was down 0.7 percent. San Diego was slightly positive, up 0.2 percent from January.

Many economists brushed off the decline as the Case-Shiller numbers capture the traditionally slow months of January and December, as well as February, because they average three months’ worth of data. The index’s year-over-year decline in home values has also been steadily shrinking in recent months.

Colorado foreclosures in February fell by 18 percent from a year earlier, but the state still remains on a Top 10 list it wants no part of – it was No. 9 for its foreclosure rate last month, according to the most recent RealtyTrac report.

The report by the Irvine, Calif.-based company found that last month, one out of every 515 households in Colorado was in some stage of foreclosure. That compares with a national rate of one out of every 577 homes in some stage of foreclosure, ranging from the first notice of a pending foreclosure to when when the property is acquired by the lender at the public trustee auction and it become a REO (Real Estate Owned) property.

“It doesn’t look like there’s been much change in Colorado’s place in the national rankings since last month,” said Ryan McMaken, of the Colorado Division of Housing, who plans to release his own foreclosure report for February on Tuesday. “Colorado continues to linger somewhat near the national foreclosure rate. Given the larger economic picture, I certainly don’t see any reason why Colorado’s foreclosure picture should necessarily be improving compared to the nation, especially considering January’s employment numbers for Colorado.”

Colorado’s unemployment rate in January was 9.1 percent, compare with the national average of 9.0 percent. The latest unemployment numbers reverses a trend in which Colorado’s unemployment rate was slightly lower than the national average.

Colorado foreclosures in February fell by 18 percent from a year earlier, but the state still remains on a Top 10 list it wants no part of – it was No. 9 for its foreclosure rate last month, according to the most recent RealtyTrac report.

The report by the Irvine, Calif.-based company found that last month, one out of every 515 households in Colorado was in some stage of foreclosure. That compares with a national rate of one out of every 577 homes in some stage of foreclosure, ranging from the first notice of a pending foreclosure to when when the property is acquired by the lender at the public trustee auction and it become a REO (Real Estate Owned) property.

“It doesn’t look like there’s been much change in Colorado’s place in the national rankings since last month,” said Ryan McMaken, of the Colorado Division of Housing, who plans to release his own foreclosure report for February on Tuesday. “Colorado continues to linger somewhat near the national foreclosure rate. Given the larger economic picture, I certainly don’t see any reason why Colorado’s foreclosure picture should necessarily be improving compared to the nation, especially considering January’s employment numbers for Colorado.”

Colorado’s unemployment rate in January was 9.1 percent, compare with the national average of 9.0 percent. The latest unemployment numbers reverses a trend in which Colorado’s unemployment rate was slightly lower than the national average.

Colorado foreclosures in February fell by 18 percent from a year earlier, but the state still remains on a Top 10 list it wants no part of – it was No. 9 for its foreclosure rate last month, according to the most recent RealtyTrac report.

The report by the Irvine, Calif.-based company found that last month, one out of every 515 households in Colorado was in some stage of foreclosure. That compares with a national rate of one out of every 577 homes in some stage of foreclosure, ranging from the first notice of a pending foreclosure to when when the property is acquired by the lender at the public trustee auction and it become a REO (Real Estate Owned) property.

“It doesn’t look like there’s been much change in Colorado’s place in the national rankings since last month,” said Ryan McMaken, of the Colorado Division of Housing, who plans to release his own foreclosure report for February on Tuesday. “Colorado continues to linger somewhat near the national foreclosure rate. Given the larger economic picture, I certainly don’t see any reason why Colorado’s foreclosure picture should necessarily be improving compared to the nation, especially considering January’s employment numbers for Colorado.”

Colorado’s unemployment rate in January was 9.1 percent, compare with the national average of 9.0 percent. The latest unemployment numbers reverses a trend in which Colorado’s unemployment rate was slightly lower than the national average.

The municipality of Broomfield was incorporated in 1961 in the southeastern corner of Boulder County. It received its name from the broomcorn grown in the area. Over the next three decades, the city grew through annexations, many of which crossed the county line into three adjacent counties: Adams, Jefferson and Weld. In the 1990s, city leaders began to push for the creation of a separate county to avoid the inefficiencies of dealing with four separate court districts, four different county seats, and four separate county sales tax bases. It also had longstanding political differences with Boulder County, which impelled it to separate. Broomfield reasoned that it could provide services more responsively under its own county government, and sought an amendment to the Colorado State Constitution to create a new county. The amendment was passed in 1998, after which a three-year transition period followed. On November 15, 2001, Broomfield County became the 64th, newest and smallest county of Colorado.